Hot Stock Tips: The Latest Scam Modus Operandi
Hot Stock Tips: The Latest Scam Modus Operandi
Who would not want to invest on stocks that can potentially good returns? In fact, that’s exactly the reason why people invest in stocks as they have the potential to increase in value exponentially.
However, not all stocks are in for a good sailing. The stock market, like all other markets, is prone to fluctuations every now and then. Specific stock prices rise and fall periodically. Well, making business is all about risks, and the stock market is a business.
Scammers have basically taken advantage of the stock market, and they continue to do so nowadays. With the latest trend involving cellular phones and SMS messaging, these good-for-nothing people have found a new avenue for their black hat schemes: the hot stock tips.
What Are Hot Stock Tips?
Hot stocks are defined basically as shares whose value is supposed to go up within the next 24 hours or so. At least, this is what the scam text messages are supposed to tell the recipient.
Hot stock tips are text messages that are aimed to entice a person to buy the stock. What actually goes behind the stuff is that the scammers are aiming to raise the price of their stock by artificially inflating demand. They do so by getting unfortunate people to purchase the stock because the cardinal rule behind markets is that the higher the demand, the higher the price.
If enough people give in to the fraud, the price does actually go up. Waiting for the opportune moment and a price high enough, these criminals owning the stock amass huge money from the buying spree. When the price is high enough, they then proceed to selling off the shares to artificially deflate the price. What happens is, they get the money, while the investors find that they have invested on a virtually worthless stock.
What To Do When You Receive a Hot Stock Tip?
Scammers intend these tips for their short-term manipulation of their stocks’ prices. That is why they promise quick returns in order to tickle the investors’ fancy and tempt them to make an investment immediately. Without investor demand, after all, their scheme would have amounted to nothing.
Prevention is better than cure. There is no way you can recover your money after these scams. So the best thing you can do about these tips: ignore it completely!
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